“The Road Less Traveled” - Builders' Show · PDF file“The Road Less Traveled” ©2006 Scott Sedam, TrueNorth The International Builders’ Show 2007 Customer Delight Pyramid

““The Road Less TraveledThe Road Less Traveled””

the critical role of suppliers &the critical role of suppliers &trades in customer satisfactiontrades in customer satisfaction

Scott SedamTrueNorth Development

Northville, MI

NAHB International Builders’ Show 2007

http://www.buildersshow.com/Home/default.aspx

“The Road Less Traveled”©2006 Scott Sedam, TrueNorth

The International Builders’ Show 2007

Anyone remember last year?Anyone remember last year?

Presentation: “Looking for love in all the wrong places”A lament on back-end, “fix it after its broke” strategies.

Oops! You call that a strategy?

Throwing people, time & money at the back end,“Build ‘em up! “Fix ‘em up!” Buy ‘em a puppy!”See “The Cost of Puppies” PB column by Scott Sedam



Customer Delight Pyramid ?Customer Delight Pyramid ?

Direct ContactActivities or elements involving face-to-face customer contact

Support ActivitiesActives & elements usually not requiring face-to-face customer contact but having an otherwise high impact that is easily seen and understood

Foundational ElementsElements that are often more subtle, sometimes not seen as tied directly to customer satisfaction, but having a profound impact nonetheless.



(more like)(more like) Customer Delight Customer Delight Iceberg!

Direct ContactSupport ActivitiesFoundational Elements

Hazardous Area(Thar be dragons!)



DIRECT CONTACTDIRECT CONTACT

1. “Written Comm.” strategy2. Sales office strategy3. Design center strategy4. Pre-construction meeting5. Construction process strategy

Weekly call? e-mails? Initiated by sales? construction?

6. Pre-drywall Orientation7. [QA “hand-off walk” *]8. Homeowner Orientation9. Closing Strategy

10.Closing survey 11.Service strategy & system

Call? Write? E-mail?12.Two-week mgt. contact13.30-day walk14.6 week survey (3rd party)15.6 month walk16.11 month walk17.1 year survey (3rd party)18.and ______________the the ““Gotcha!Gotcha!””



DIRECT CONTACTDIRECT CONTACT20 Presentations 20 Presentations –– guess how many got #18 ?guess how many got #18 ?

1. “Written Comm.” strategy2. Sales office strategy3. Design center strategy4. Pre-construction meeting5. Construction process strategy

Weekly call? e-mails? Initiated by sales? construction?

6. Pre-drywall Orientation7. [QA “hand-off walk” *]8. Homeowner Orientation9. Closing Strategy

10.Closing survey 11.Service strategy & system

Call? Write? E-mail?12.Two-week mgt. contact13.30-day walk14.6 week survey (3rd party)15.6 month walk16.11 month walk17.1 year survey (3rd party)18.and ______________the the ““Gotcha!Gotcha!””



One! One! (and he cheated!)(and he cheated!)

How is this possible? Despite the fact that 95% of the people who do the work for builders, don’t work for the builders, no one gives them much thought when it comes to customers?



Support ActivitiesSupport Activities

Behind each & every customer interface lies internal communication, systems & structures.Internal Communication is nothing less than criticalHal Peller, TND facilitator extraordinaire, is a genius! Wherever he goes he asks,

“I’ll bet you have communication problems here!”

Huge, messy, complex, often ugly problem




Suppliers& Trades

Construction

Purchasing Estimating

Sales

Architecture/ Design Design

Center

ServiceLandDev.

Marketing

etc.etc. etcetc.. etcetc..

Finance Accounting




Internal CommunicationBottom line: Once you build more than 100 homes/year, you can’t leave communication as an ad hoc system

The Default Option for organizations is lousy communicationYou must build in the systems & structures to enable –and everyone is accountable: e.g.

Weekly sales & construction meeting on site at a minimumMonth community reviews in the field



Support ActivitiesSupport Activities (cont(cont’’d) d)

a small sampling of indirects a small sampling of indirects

New community Start-up SystemHome “Start-package” SystemPlans, Options & Selection System – bulletproofCorrective Action Systems (e.g.)

Plans currentPlan correction & update

Trade Development StrategyWho gets the best trades – and the best crews?

Recruiting, Hiring & Orientation StrategyTraining StrategyAdvertising strategy




Q: How many support Activities involved suppliers & trades?

Q: Do you think this impacts customers?



Regarding Plans, Options, Colors & Selections: (multiple choice test, pick one.a) Have bulletproof systemsb) Keep it very simplec) Drive yourself, your trades

& your customers crazyMost Builders have unnecessarily complex product, messy systems & convoluted processesThe definition of a good system/process …

Foundational ElementsFoundational Elements

Complexity curve



Foundational Elements Foundational Elements (cont(cont’’d)d)

Clear business strategyProduct focusMarket segmentBusiness model

Option, colors, selection process defined, maintainedPAY ON TIMEService Tracking Data system

Manual or automated



Foundational Elements Foundational Elements (cont(cont’’d)d)

Schedule, schedule, scheduleMost Builders say …Most suppliers and trades say …

“Electronics will solve this once and for all!” (lol)

The handheld & otherwise automated schedule nightmare.Field personnel runs two systemsISD staff is contemplates hari kariVP’s are being fooled, in denial, or looking the other way.



Foundational ElementsFoundational Elements

Q: How many foundational elements involved suppliers & trades?

Q: Do you think this impacts customers?



““The LetterThe Letter””

Dear Mr. President, Does it look a little different now?



A huge factor few understand*A huge factor few understand*

The impact of

TIMETIMEConceptually, its so simple its frighteningIn practice its astoundingly difficult but…Does it have to be???

http://wrestlingaids.com/prod_images/S660_l.jpg



CautionCaution

You cannot build your organization on the backs of heroes. The role of a hero is to do astounding things in times of:

WarMajor AccidentsNatural Disasters

So unless you define your company as one of the above …But when they are needed

… will they, can they, step up?



Regarding the Hero Strategy:Regarding the Hero Strategy:

““So howSo how’’s THAT workins THAT workin’’ for ya?for ya?””Dr. PhilDr. Phil



In 1992, James CarvilleIn 1992, James Carville’’s sign said s sign said ……

IT’S THE ECONOMY, STUPID!5 years ago – my column said …

IT’S THE CULTURE, STUPID!And 5 years later, nothing has changed …

IT’S STILL THE CULTURE, STUPID!And your culture includes your suppliers & trades!



The TrueNorth Award for ExcellenceThe TrueNorth Award for Excellencein Builder/Supplier/Trade Relationshipsin Builder/Supplier/Trade Relationships

National or Regional Builder:John Laing Homes, Denver DivisionGrayson Homes, Baltimore

There is a tangible difference in cultureIf you can’t see it, you don’t get it!



Culture in its simplest formCulture in its simplest form

No Fear --Any and all news up and down*A shared commitment to “do the right thing.”

With associated folklorePrevention mentality

Always seen in “house complete”Understand the concept of 1-10-100

Truly open communicationUp – down / down – up. (most people get that.)Often the biggest problem is peer level, especially on the management. team

A bias for execution



What Culture says about CustomersWhat Culture says about Customers

Customers First?

Second?

Perhaps a very close Third!



Customers Come Third?Customers Come Third?

1st – your employees2nd – your suppliers & tradesIf you do that well, your customers will do better than those builders who place them first!

Caveat: 1st, 2nd & 3rd should be almost impossible to distinguish among the people within the groups! They will all feel like #1.



Just how do we get our suppliers & trades to joinJust how do we get our suppliers & trades to joinwith us in the goal of creating customer delight?with us in the goal of creating customer delight?””

And theyAll said …

So we askedSo we askedthe experts,the experts,

http://www.housingzone.com/topics/pb/pix/pb02aa024a.jpg



The bottom lineThe bottom line

I am a HUGE believer in the creation of a robust system to manage the Total Customer ExperienceWithout the organizational culture to support and sustain it, you are wasting your time.It takes BOTH the System & the Culture.

But if your suppliers & trades don’t buy in,

forget about it !



The meeting that changed everything!The meeting that changed everything!March 1989 March 1989

““Fire up the wayback machine, ShermanFire up the wayback machine, Sherman””

http://www.garagepunk.com/support/othergraphix/cartoon.gif



The speech!The speech!

March, Bloomfield Hills, MI“Harriet ups the ante!”

October, 1989, Chicago“Mike has the epiphany”



You think you are doing it?You think you are doing it?So Prove it!So Prove it!

Example: The $1,000,000 question ….Ask you purchasing managersAsk your field superintendents. & customer service managers

You say you have the best trades? Let’s see your evaluation criteriaAnd what about the best crews?



More Prove it More Prove it (2/3)(2/3)

You say you know how to choose trades? Show us your selection criteria? What about the “mystery factor”

You say get Supplier Trade Feedback? Show us your system?Do you put 1/10 the effort into it that you do getting customer feedback?



More Prove it More Prove it (3/3)(3/3)

You say you develop your Suppliers & Trades?Show us your training schedule!Both ways!

You involve your Suppliers & Trades in continual improvement?

Show us your supplier/trade councilShow us your monthly plan reviewShow us your VA/VE

““ItIt’’s all about the Culture, baby,s all about the Culture, baby,its all about the Culture !its all about the Culture !””

Steve Petruska, Pulte COO, during Q & ASteve Petruska, Pulte COO, during Q & Aat the end of the quality training workshopsat the end of the quality training workshops

that all 12,000 employees and hundredsthat all 12,000 employees and hundredsof suppliers & trades are required to attend,of suppliers & trades are required to attend,

“…“… and without your suppliers & trades and without your suppliers & trades on board, your culture is nowhereon board, your culture is nowhere””

Scott Sedam, after two decadesScott Sedam, after two decadesof trying to crack the code.of trying to crack the code.



All I have to offer you is

Profit!Dr. W. Edwards Deming



CONTACTSCONTACTS

Scott Sedam, PresidentTrueNorth Development, Inc.141 N. Center Suite 201Northville, MI [email protected] www.TrueNorthConference.com

www.probuilder.com Click columnists, then Scott Sedam“Lesson’s Learned” – Current Professional Builder Columns8 years of column archives

mailto:[email protected]

Documents

“The Road Less Traveled” - Builders' Show · PDF file“The Road Less Traveled” ©2006 Scott Sedam, TrueNorth The International Builders’ Show 2007 Customer Delight Pyramid